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Hospitals face termination by insurance companies over fraud

FILE PHOTO: Health worker in hospital

Kampala, Uganda | THE INDEPENDENT | Several hospitals face termination from serving clients who have health insurance policies after insurance companies accused them of fraud.

This comes after The Uganda Insurers Association (UIA)-commissioned a fraud survey in 2018/19 financial year that found wide-spread cheating with hospitals putting in fictitious claims.

Faith Ekudu, the spokesperson of Uganda Insurers Association, confirmed to the URN the survey findings but said they would let service providers discuss the actions to be taken.

In a letter last Friday on 1 November 2019, Jubilee Insurance wrote to its customers terminating services of 23 hospitals from Kampala and surrounding areas.

Jubilee Insurance said that “although this action may result into some regrettable inconveniences, it is done in good faith to ensure your benefits are not robbed in the manner the affected facilities have been doing.”

Jubilee didn’t respond to URN’s request to elaborate the kind of fraud and neither did the insurers’ association.

However, in a note on Jubilee Insurance website, the company says while fraud affects all business lines in the insurance sector, it has been increasingly prevalent in the medical class of business.

It is done in various ways, including collusion between the policy holders and health service providers, inflated bills from hospitals and clinics, hospitals making patients take unnecessary tests, impersonation or dual membership by policy holders and pharmacy related fraud.

Also, some hospitals were found to apply two tier pricing for their services. This happens when a patient who presents their medical card is charged more than a patient who pays in cash for the same service.

According to the Insurance Regulatory Authority (IRA) report for 2018, medical insurance uptake is one of the fast-paced segment of insurance in Uganda – now the largest class of business by corporate institutions.

Medical insurance gross written premium grew by 26.96% from Uganda shillings 161bn in 2017 to shillings 204.05bn in 2018.

With this growth, fraud has also grown. Last year, IRA and insurers association set up the Anti-Fraud Unit to investigate fraudulent cases in the industry.

At least 17 cases worth Shillings 2.5bn were investigated in the 2018/19 financial year.

Dr. Isaac Nkote Nabeta, the IRA board chairman said this indicates the need for insurers to tread judiciously to remain afloat without jeopardizing the interests of the policy holders.

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